Enc. 2.
4
was turned down by the War Office and Treasury largely
on the ground that it might involve a decreased con-
tribution but partly also because it was feared that
this method would give rise to as many difficulties in
practice as the old. The story is fully set out in
the attached bundle of prints.
The difficulty in accepting any proposal
for a change in the basis of contribution is to get
the War Office and the Treasury to agree, the main
point being, from their point of view, that the actual
amounts paid should not be decreased.
The Governor's
proposal should, I think, avoid this and the comparison
with the statement of previous contributions is as
striking. It is in fact a matter for consideration
whether the sum is not in fact too great a burden on
the Colony and whether we should agree to it, but I
think it is probable that the next few years at least
will show an increased level of expenditure, and
therefore of revenue, in Hong Kong. The amount pay-
able in respect of the current year may in fact be
higher than $6,000,000 but this is due to the
artificial boom created by the Sino-Japanese hostilitie a
and as the Governor points out, a similar revenue
cannot be counted upon for the future. It seems to
me therefore that the present proposal is one which is
sufficiently generous to the War Office but has many
advantages from the point of view of Hong Kong and
we may therefore approve it for our part.
The recent discussion about the amount of
the Straits Settlements' contribution may not have
disposed the Treasury and the War Office favourably
to this proposal but it does not include the feature
that
which